ACNB Corporation Reports Fourth Quarter and 2024 Financial Results

GETTYSBURG, Pa., Jan. 23, 2025 (GLOBE NEWSWIRE) -- ACNB Corporation (NASDAQ: ACNB) ("ACNB" or the "Corporation"), financial holding company for ACNB Bank and ACNB Insurance Services, Inc., announced net income of $6.6 million, or $0.77 diluted earnings per share, for the three months ended December 31, 2024, a $2.5 million, or 61.0%, increase, compared to net income of $4.1 million, or $0.48 diluted earnings per share, for the three months ended December 31, 2023 and a $609 thousand, or 8.5%, decrease compared to net income of $7.2 million, or $0.84 diluted earnings per share, for the three months ended September 30, 2024. The Corporation reported net income of $31.8 million, or $3.73 per diluted earnings per share, for the twelve months ended December 31, 2024, an increase of $158 thousand, or 0.5%, compared to the twelve months ended December 31, 2023. The financial results for both the three and twelve months ended December 31, 2024 were impacted by $885 thousand and $2.0 million, respectively, in merger-related expense due to the pending acquisition of Traditions Bancorp, Inc. Financial results for the twelve months ended December 31, 2024 were impacted by a $2.8 million reversal of the provisions for credit losses and unfunded commitments. Financial results for the twelve months ended December 31, 2023 were impacted by a repositioning of the investment securities portfolio in which ACNB sold approximately $51.1 million in book value of available for sale investment securities generating an after-tax loss of approximately $3.5 million.

2024 Highlights

   -- Return on average assets was 1.31% and return on average equity was 
      10.94% for the twelve months ended December 31, 2024. 
 
   -- Fully taxable equivalent ("FTE") net interest margin was 3.79% for the 
      twelve months ended December 31, 2024 compared to 4.07% for the twelve 
      months ended December 31, 2023. 
 
   -- Total non-performing loans to total loans, net of unearned income, was 
      0.40% at December 31, 2024 compared to 0.26% at December 31, 2023. The 
      increase in non-performing loans to total loans, net of unearned income, 
      for the twelve months ended December 31, 2024 was driven primarily by one 
      long-standing commercial relationship in the healthcare industry, 
      comprised of both owner-occupied commercial real estate and commercial 
      and industrial loans, that moved into non-performing loan status during 
      the current year. 
 
   -- Net charge-offs to average loans outstanding were 0.02% for both the 
      twelve months ended December 31, 2024 and 2023. 
 
   -- Tangible common equity to tangible assets ratio1 of 10.72% at 
      December 31, 2024 compared to 9.48% at December 31, 2023. The net 
      unrealized loss on the available for sale securities portfolio was $47.7 
      million at December 31, 2024 compared to a net unrealized loss of $50.2 
      million at December 31, 2023. 
 
   -- ACNB and ACNB Bank capital levels remain well in excess of ACNB's 
      internal minimums and those required to be categorized as a 
      well-capitalized institution by our bank regulators. 

"We are excited to share a strong year of operating results with our shareholders. Our continued focus on community banking principles have produced another year of solid financial performance and continued strong returns for our shareholders. In addition, we were successfully able to announce the strategic acquisition of Traditions Bancorp, Inc. that will create one of the largest community banks in Pennsylvania with assets less than $5 billion. We currently expect the acquisition of Traditions Bancorp, Inc. to be effective February 1, 2025," said James P. Helt, ACNB Corporation President and Chief Executive Officer.

"As we turn our focus to 2025, we look forward to successfully integrating Traditions Bank's customers and employees into the ACNB model as we expand our presence in York and Lancaster counties. We are confident that this acquisition will complement our current operations with profitable growth opportunities and will contribute to our commitment of enhancing long-term shareholder value."

Mr. Helt continued, "We would like to express our gratitude for the continued support of our shareholders, customers and employees that have enabled us to fulfill our vision to be the independent financial services provider of choice in the markets that we serve by building relationships and finding solutions."

Net Interest Income and Margin

Net interest income for the three months ended December 31, 2024 totaled $21.1 million, an increase of $170 thousand, or 0.8%, compared to the three months ended September 30, 2024 driven by an increase in the FTE net interest margin over the same period. The FTE net interest margin for the three months ended December 31, 2024 was 3.81%, an increase of 4 basis points from 3.77% for the three months ended September 30, 2024. The increase in FTE net interest margin was driven primarily by the recognition of nonaccrual interest income on a commercial loan removed from nonaccrual status, a decrease in average short-term borrowings, a decrease in a time deposit promotional rate and an increase in seasonal, lower-cost deposits. Total average loans decreased $4.4 million, or 0.3%, compared to the three months ended September 30, 2024. The yield on total loans was 5.61% for the three months ended December 31, 2024, an increase of 5 basis points compared to the three months ended September 30, 2024. Total average borrowings decreased $15.6 million for the three months ended December 31, 2024 compared to the same period in September 30, 2024. A short-term $25.0 million FHLB advance was paid off during August of 2024. The average rate paid on total borrowings was 4.27% for the three months ended December 31, 2024, a decrease of 4 basis points from the three months ended September 30, 2024. Total average interest-bearing deposits increased $14.3 million, or 1.1%, for the three months ended December 31, 2024 compared to the same period September 30, 2024 driven primarily by a $10.5 million increase in average time deposit balances due to an ongoing promotion and an increase in brokered time deposits. In October of 2024, ACNB Bank issued $24.1 million in brokered time deposits. The average rate paid on interest-bearing deposits was 0.96% for the three months ended December 31, 2024, an increase of 4 basis points from the three months ended September 30, 2024.

Net interest income for the twelve months ended December 31, 2024 totaled $83.6 million, a decrease of $4.7 million, or 5.3%, from $88.3 million for the twelve months ended December 31, 2023 driven by a decrease in the FTE net interest margin over the same period. The FTE net interest margin for the twelve months ended December 31, 2024 was 3.79%, a 28 basis points decrease from 4.07% for the twelve months ended December 31, 2023. The decrease was driven primarily by a higher cost of funds and an increase in long-term borrowings. The average rate paid on interest-bearing deposits was 0.83% for the twelve months ended December 31, 2024, an increase of 58 basis points from the twelve months ended December 31, 2023. The average rate paid on total borrowings was 4.36% for the twelve months ended December 31, 2024, an increase of 74 basis points from the twelve months ended December 31, 2023. Total average borrowings increased $162.5 million, or 127.2%, for the twelve months ended December 31, 2024 compared to the same period of 2023. The average yield on interest-earning assets was 4.86% for the twelve months ended December 31, 2024, an increase of 41 basis points from the twelve months ended December 31, 2023. Total average loans grew $94.9 million, or 6.0%, and the yield increased 36 basis points for the twelve months ended December 31, 2024 compared to the same period of 2023.

Noninterest Income

Noninterest income for the three months ended December 31, 2024 was $5.8 million, a decrease of $1.0 million, or 15.1%, from the three months ended September 30, 2024. The decrease was driven primarily by insurance commissions and wealth management income. Insurance commissions for the three months ended December 31, 2024 were $2.1 million, a $682 thousand, or 24.5%, decrease from the three months ended September 30, 2024 due to seasonality in policy renewals. Wealth management income was $1.0 million for the three months ended December 31, 2024, a $181 thousand, or 15.2%, decrease from the three months ended September 30, 2024 driven primarily by lower estate income.

Noninterest income, excluding net gains (losses) on sales or calls of securities, for the twelve months ended December 31, 2024 was $24.7 million, an increase of $976 thousand, or 4.1%, from the twelve months ended December 31, 2023. On December 15, 2023, ACNB completed a repositioning of the investment securities portfolio by selling $51.1 million in book value of AFS debt securities, consisting of lower-yielding agency debt securities, for an estimated pre-tax loss of $4.5 million. The increase in noninterest income, excluding net gains (losses) on sales or calls of securities, was driven primarily by wealth management income, insurance commissions and gain from mortgage loans held for sale. Wealth management income for the twelve months ended December 31, 2024 was $4.2 million compared to $3.6 million for the twelve months ended December 31, 2023. The increase was driven primarily by portfolio market appreciation, estate income and new business generation. Insurance commissions for the twelve months ended December 31, 2024 were $9.8 million compared to $9.3 million for the twelve months ended December 31, 2023. The increase of $435 thousand was driven primarily by growth in commissions on policy renewals and new business. During the twelve months ended December 31, 2024, gains from mortgage loans held for sale increased $245 thousand, compared to the twelve months ended December 31, 2023 as a result of a higher volume of mortgage

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